India’s New HR Challenge: Managing a Multigenerational Workforce

Diversity and inclusion have been steadily gaining traction in corporate India in recent years. Much of this is centered on gender diversity, and companies are beginning to realize the business imperative of hiring women and creating an equitable work environment. But there is another aspect that human resource managers in India need to wake up to: The importance of effectively managing a multigenerational workforce.

One may argue that organizations across the world have always had to manage a multigenerational workforce. While that is true, India’s demographics are creating some unique challenges. Even as the world is graying, India is getting younger. By 2020, the average Indian will be only 29 years of age compared with 37 in China and the U.S., 45 in Western Europe and 48 in Japan. Currently, more than half of India’s population is less than 25 years of age.

“India has gone through more changes in the past 20 years than most countries witness over a century.” –Amit K. Nandkeolyar

Given India’s population of over a billion, these make for very large numbers. What’s more, this large pool of new workers comes with a mindset very different from that of the earlier generations. Experts note that this difference between generations is far more striking in India than elsewhere because of the country’s rapid pace of liberalization and increasing globalization since the 1990s. India has also leapfrogged through tremendous advances in technology, including the adoption of mobile phones, the Internet and social media.

Adding to the Complexity

“India has gone through more changes in the past 20 years than most countries witness over a century,” says Amit K. Nandkeolyar, assistant professor of organizational behavior at the Indian School of Business. Pointing to India’s vast socio-economic and cultural diversity, Nandkeolyar adds: “Employees come from different regions, religions, linguistic traditions, castes, communities, culinary tastes, races and genders. A generational difference adds another layer of complexity. This creates a workforce that can find itself divided in more ways than comparable workforces in most countries.”

Vishalli Dongrie, senior director at consulting and services firm Deloitte Touche Tohmatsu India, notes: “The current generation in India entering the workforce has seen abundance in options and affluence early in life. They are also more independent and more aware of global opportunities. This is reflected in the decreasing loyalty toward their employers and the increasing focus on short-term goals. Globally, the shift has not been so pronounced.”

Puja Kohli, an independent human resources consultant, points to another aspect: The dissonance between the home environment and the workplace. Kohli observes that parents in India have become far more open to including their children in decision making — what kind of house to live in, what make of car to buy, where to go on a holiday and so on — but the workplace continues to be in a “plan, control and review” mode. “This results in conflict and disengagement at the workplace,” says Kohli.

Last year, Kohli conducted a study titled, “Managing in a Multigenerational Workplace,”in collaboration with the National Association of Software and Services Companies (Nasscom).The objective of this study was to understand the competencies needed to manage millennials in the information technology/information technology enabled services (IT/ITeS) sector, which is among the largest recruiters of youth in India. More than 60% of the employees in this sector are less than 30 years of age.

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In her study, Kohli focused primarily on five areas: Values, interpersonal relationships, commitment, work ethics and world view. Kohli notes: “The need to build skills and competencies, and freedom and empowerment are the topmost priorities for the youth in this sector, followed by recognition and appreciation.” Interestingly, the need for freedom and empowerment spans a host of issues: vocabulary, dress code, flex-time, work-life balance, use of social media and so on.

Dilpreet Singh, vice president of human resources at IBM India & South Asia, observes: “This is a generation that is not hierarchical in its outlook. It respects competencies and knowledge and not so much authority that simply comes with age or position.” And herein lies the rub: In most organizations, policies are created by a group of senior people who don’t understand the mindset of the youth. Som Mittal, who until recently was president of Nasscom, says: “We find that the gap between the traditional outlook of people who are taking decisions and those who are getting impacted by these decisions is increasing. This is resulting in a mismatch.”

Building a ‘Salsa Culture’

What is at stake if this gap continues to increase? Last year, Deloitte and the Confederation of Indian Industries released a report titled, “Gen Next Workforce Study, 2013.” Based on its findings, Deloitte’s Dongrie says: “The evolving preferences of the current generation [in India] pose perplexing challenges for organizations looking at attracting, engaging and retaining them.” According to Dongrie, if organizations don’t address the issues arising out of a multigenerational workforce, it can result in “a lower engagement rate, loss in productivity and a higher attrition rate.” It could also lead to a “situation of unrest among the workforce. Ultimately, the output from the investment in human capital will be much lower than its true potential.”

“Firms must develop a greater awareness of what [influences] shape each cohort, without stereotyping.” –Saundarya Rajesh

If organizations don’t take appropriate steps, “they will lose out on the best talent and what it can do for them,” Singh of IBM notes. “They will lose out on new ideas. This will severely impact an organization’s competitiveness. At a national level, India will lose out on the human resource that can take it forward.”

So what is it that companies need to do? According to ISB’s Nandkeolyar, firms must emphasize the commonalities that bind all employees together and deemphasize the differences, especially in terms of age and experience. “We need to understand, celebrate and encourage diversity in workplace. This will help all employees to work toward a common goal.” According to Mittal of Nasscom, the generational gap can be bridged through constant dialogue. “We need to break hierarchical boundaries and involve all generations of employees in decision making.”

Nirmala Menon, founder and CEO of Interweave Consulting, which focuses on diversity management and inclusivity in the workplace, believes that senior employees need to be more open to making adjustments and changes since the workforce and the workplace will now be increasingly defined by younger employees. “It’s more a mindset issue than chronological age. One needs to be open to accepting differences, whatever they may be. A one-size-fits- all approach will not work,” she says.

According to Subhro Bhaduri, executive vice president at Kotak Mahindra Bank, companies need to provide “high clarity, sharp direction, in-depth job knowledge and abundant skills” to their young employees, along with keeping them abreast of the latest developments in their industry. “The current generation is keen to know what they are doing, why they are doing it and what they would derive from the same,” Bhaduri says. “The new workforce is also keen to get variety in roles and functional areas in order to remain excited about work. In addition, there is an increased aspiration level and corresponding growth expectations which have to be managed.”

Saundarya Rajesh, HR professional and founder-director of Avtar Careers Creators and Flexi Careers India, suggests that organizations must invest in building “generational competence” — that is, “firms must develop a greater awareness of what [influences] shape each cohort without stereotyping.” According to Rajesh, organizations must work toward developing a “salsa culture, which is a sum of many parts and where each part retains its unique identity.” Rajesh adds that organizations also must “target the right talent strategies to the right set of employees.”

Defining Non-negotiables

Some companies are starting to address this issue. At IBM, for instance, in keeping with the younger generation’s preference for using their own devices at work, employees are allowed to bring these to the workplace. These devices are allowed be connected to the organization’s IT systems after ensuring due security measures. IBM also has its own internal social networking platform where employees can raise queries, post their views and interact with colleagues without having to go through the traditional organizational hierarchy. “This is a media that the new generation identifies with strongly, and it has made quite a difference in managing the workforce. [Employees] can reach out to anyone anytime they want without having to go through their immediate boss,” says Singh.

“The core values of the organization must be non-negotiable. Everything else that can be accommodated, should be.” –Nirmala Menon

At HCL, initiatives include being more interactive on social media at the time of recruitment, the use of the gamification to motivate workers, an increased emphasis on change management, and ensuring that training methodologies are more aligned to the ways of the young employees. “For instance, the one-to-many training is not easily adaptable to the way the newer generation likes to learn,” says Naveen Narayanan, lead of talent acquisition, development and mobility at HCL. “The technologies that some of these youngsters experience for free outside of work is perhaps more savvy than what they have within the workplace. We need to be conscious of this and devise new ways of interacting with them.”

Santosh Singh, talent acquisition director for the Asia Pacific region at construction and mining equipment firm Caterpillar, notes that a major challenge of a multigenerational workforce is to move away from stereotypes and engage with employees as individuals. “We encourage and position our supervisors and managers to get to know their employees better and to understand and champion their aspirations,” he says.

But this raises another pertinent question: How can an organization maintain its culture and at the same time address the needs and aspirations of different generations at the workplace? IBM’s Singh says that the answer lies in ensuring that there is no compromise when it comes to the core values of the organization. “Our values are what bind us together. While we may be flexible in many areas, there is no compromise on this. We work hard at ensuring that these core values are understood and imbibed by every new generation that comes in.” Menon of Interweave agrees: “The core values of the organization must be non-negotiable. Everything else that can be accommodated, should be.”

According to Kohli, in order to be effective and impactful, the initiatives around the multigenerational workforce must be part of the top management’s agenda. “It must be addressed not only by HR teams or diversity groups but also by business heads.” Pointing out that in most companies in India the awareness of the challenges of a multigenerational workforce is still at a very nascent stage, she adds: “If organizations don’t awaken to this issue fast and take the necessary steps, they will become cultural dinosaurs and lose their best talent and their competitive edge.”